Australian Carbon Credit Scheme Under Scrutiny

With a change of Australia's federal government in May 2022, there has been a radical shift in the country's position on climate change mitigation and the energy transition. The new Labor government has committed to a carbon emissions reduction target of 43% below 2005 levels by 2030. That target is markedly more ambitious than the previous government's target of a 26% to 28% reduction over the same period. For those doing business in Australia, this policy shift presents both heightened risks as well as commercial opportunities, as Australia accelerates efforts to reach net zero by 2050.

One mechanism by which businesses operating in Australia can seek to reduce their carbon footprint is by earning Australian carbon credit units ("ACCUs") (for example, by avoiding deforestation or regenerating forests) or by purchasing ACCUs on the secondary market to offset the entity's emissions.